Sudden slowdown of the European Stock Exchanges after a brilliant start. The FtseMib index of the Milan Stock Exchange loses 1,48%, to 14376. Madrid is in free fall (-2,21%), Paris is still positive (+76%) and Frankfurt (+0,3%) . London marks a drop of 0,47%.
After yesterday's good data from the US and Chinese manufacturing sectors, there is a flurry of negative data in Europe. Even from Germany, where unemployment rose to 6,8% in April, when economists' forecasts indicated it stable at 6,7%. In practice, the German unemployed increased by 19 units, while a drop of 10 units was expected. Unemployment in the euro area is back to double digits: 10,1% of the workforce is unemployed.
The PMI index which photographs the performance of the manufacturing sector in the euro area in April reached its lowest level since June 2009, falling to 45,9. All the main economies of Euroland show a marked decline. The figure is slightly lower than the flash estimate of 46 and down from March's 47,7. Among the sub-indexes, the one on production fell to 46,1 and reached its lowest level in the last five months. In March, it stood at 48,7, while the flash estimate was 46,4. The employment sub-index is at its lowest since February 2010, confirmed, compared to the flash estimate, at 47,6 against 48,7 in March.
Today is scheduled in Brussels the extraordinary meeting of Ecofin: at the center of the summit will be the attempt to find a political agreement on the proposal for a directive which will have to transpose the Basel III rules on bank capital into European legislation. According to the latest developments, there is a convergence on whether individual states can ask their banks for an extra capital buffer. Investors are stalling ahead of tomorrow's Spanish auctions and the outcome of Sunday's French general election.
As far as Italy is concerned, the growing frictions of the majority that supports the caretaker government of Mario Monti do not help to calm the climate.
Backtrack also by ten-year BTP, with the yield rising to 5,51% and the Bund spread widening to 388 points (+8 points). The Spanish spread rose by 7 basis points to 415, Holland was flat at 57 bps, France +4 bps to 133.
At the same time, the euro touched its lows for the session and the spread on ten-year Btp/Bund widened again after starting below 380 basis points. Banks and industrial cyclicals are bad in Piazza Affari. Below Finmeccanica (-0,62%) awaiting tomorrow's quarterly report. The subsidiary Ansaldo drops by 4,35%.
In cash St Microelectronics (+ 3,02%) and Luxottica (+43,7%) thanks to rating and target price improvements. The first was promoted by Goldman Sachs a buy da neutral with a target price of 6,30 euros. Luxottica is pushed by Bank of America which has raised its recommendation to buy da neutral setting a target price of 31,5 euros, up from the previous 27,5 euros.
Realized Ferragamo (-5,79%), after five consecutive sessions of strong increases in which it gained a total of 25%. It also goes down cucinelli (-3,5%).
But the banks are leading the retreat: Ubi- 3,8%, Popular Milano -3,99% Banco Popular -4,1% Understanding -3,32%. Positive oil with Eni which rises by 1,4%, Saipem -0,83% Tenaris -0,21%. Among the industrialists, Fiat -0,71% despite Chrysler's good sales results in April. Pirelli + 2,1% Piaggio +3,6%, down Fiat Industrial (-1,4%).
